Recent debate among Thai policymakers has focused on trade-offs between two rice policies, the price support program (PSP) and the deficiency payment program (DPP). The PSP is currently operating but has been criticized for large budgetary costs, corruption, and unequal distribution of program benefits. To inform this debate, this dissertation provides quantitative measures of the trade-offs between these programs, and the ranking of farmers' preferences towards them. In addition, the relationship between program participation, production technology choice, and levels of technical efficiency are also investigated. The first essay in this dissertation investigates welfare impacts of PSP and DPP measured in terms of changes in producer surplus, consumer surplus, and deadweight loss by applying a partial equilibrium model to calculate counterfactual market prices and quantities. The 2005/06 cropping season is used as a base for the calculations because of data availability. The results indicate that DPP is more efficient than PSP because the program results in a larger percentage increase in producer surplus and smaller deadweight loss generated for a given amount of Government spending. The increase in producer surplus and the deadweight loss are estimated to be 93-97% and less than 1%, respectively under DPP compared to 28-51% and 11-14% under PSP. Consumers, especially domestic consumers, are much worse off under PSP as their surplus shrinks considerably, while it increases under DPP. The second essay investigates the preference ranking of a representative rice farmer in Thailand towards PSP and DPP using stochastic efficiency with respect to a function (SERF). SERF ranks the farmer preferences based on the certainty equivalent (CE) values associated with the stochastic profits under each policy scenario. Profit is stochastic because of yield variability, price volatility, and the risk of delayed payments under PSP. The preference ranking by SERF indicates that a risk-averse farmer clearly prefers DPP to PSP when support and target prices are much higher than the market price. However, the farmer is largely indifferent between the two programs when the price differential is small. In addition, it is shown that the farmer is better off under PSP compared to a no intervention scenario, even if their choice is to not participate, because of increases in the market price brought by the program. The third essay investigates production technologies and levels of technical efficiency among program participants and non-participants of the PSP, as well as key determinants of farmers' decisions to participate in the program. The participation decision is included in the model to account for possible selection bias in estimating stochastic production frontiers and technical inefficiency levels. Results indicate that key factors in the participation decision include land size and the financial position of the farm. Results also show there is no strong evidence to support the presence of selectivity bias in the stochastic frontier estimates. In addition, a likelihood-ratio test indicates that participants and non-participants use the same frontier production technology. However, the analysis of technical efficiency reveals that participants are more technically efficient than non-participants. The findings therefore suggest that larger farmers participate more in the PSP and that these program participants tend to be more technically efficient farmers, although the analysis was not able to determine the direction of causality for this association.
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